London — UK Prime Minister Andy Burnham has indicated reluctance to pursue significant tax increases in the upcoming budget, signaling a cautious approach as Chancellor of the Exchequer John Healey prepares to unveil the government’s financial plans on Monday. This stance marks a shift away from recent Labour budgets, which saw substantial tax rises under former Chancellor Rachel Reeves.

Between 2029 and 2030, Reeves’ budgets raised taxes by a combined £68 billion, pushing the tax-to-GDP ratio to a projected record 38 percent by 2030, according to the Office for Budget Responsibility. Speaking to reporters en route to the United Nations in New York this week, Burnham emphasized the need to avoid repeating such aggressive tax hikes, saying the government must “get the balance right” after having raised revenue significantly in the 2024 and 2025 budgets.

Treasury officials have reportedly considered options for targeted tax increases on sectors such as banking, oil and gas, and gambling, but Burnham’s comments suggest Chancellor Healey may adopt a more restrained approach. The Treasury has previously signaled that Healey does not intend to introduce a budget of comparable scale to his predecessor’s.

Economic analysts widely anticipate that some tax increases may be necessary to address the deteriorating public finances. Rising borrowing costs, exacerbated by the ongoing conflict in Iran and associated global uncertainties, have eroded the government’s fiscal buffer. Bloomberg Economics estimated earlier this month that surging gilt yields could reduce the UK’s financial reserve by approximately £12 billion from its existing £23.6 billion level.

Burnham acknowledged the UK’s heavy reliance on global bond markets, describing the country as “overexposed.” He defended his previous remarks that Britain should avoid becoming overly indebted to international investors. At the same time, he declined to specify whether the government’s future tax measures would focus more on wealth or income taxes, deferring such details to Healey’s forthcoming budget.

The prime minister recognized the challenging economic environment resulting from global conflicts, particularly the war in Iran. He noted that his administration was not caught off guard by the worsening outlook, citing detailed briefings and negotiations held prior to his assuming office in July. However, he acknowledged that the situation has evolved over recent months, complicating the government’s fiscal planning.

Despite these headwinds, Burnham intends to use his first keynote speech at Labour’s annual conference next week to convey a message of optimism and renewal. “It’s time for Britain to believe again, it’s time for Britain to have hope again,” he said, emphasizing a vision for a more stable and forward-looking UK after a decade of economic challenges.